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i have been warning you about it for months. now that the election is over, the fiscal cliff is finally getting some love. it's an economic storm of our own making that could trigger another recession and kill up to a million jobs next year if congress and the president don't act. i'm ali velshi. this is "your money." the elections are over. the american people have spoken. now it's time for washington to get to work. >> you elected us to focus on your jobs, not ours. >> that's because nothing is more important to our economic recovery than creating jobs. president obama says he'll add 12 million jobs over the next four years.
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but for his math to work, the pace of economic growth needs to pick up. with a crisis in europe and a slowdown in asia, an economic storm beyond our control stands ready to batter our shores. still, two years of consistent job growth prove we are heading in the right direction, but the fiscal cliff is one storm that will be of our own making unless washington acts. $7 trillion in across-the-board tax hikes and spending cuts over the next decade mandated to begin in january. it's the legislative equivalent of a slow motion train wreck that washington can avoid. the question? will congress and the president drive that train over a cliff? >> we won't solve the problem of our fiscal imbalance overnight. >> the elections are over. the threats to our economy are not. time to get to work. and there is lots of work to be done.
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it starts with averting this disaster of our own making. i repeat that. the fiscal cliff. we've got it covered from all angles as only cnn can. christine romans is host of cnn's "your bottom line." david walker spent a decade overseeing the federal government, how it spends your tax dollars as the u.s. comptroller general. today he's the ceo of comeback america and he's a deficit hawk. the ceo of pimco. hisfirm is one of the largest investors of bonds, and steve moore is a conservative, founder of club for growth and a writer at the wall street journal. i'm going to start with you, steven, my good friend. the fiscal cliff is an immediate threat. both parties need to come together to fix it, because not fixing it would set even fiscal conservatives back, don't you agree? >> yeah, and i think other conservatives agree that he don't want to go off this fiscal cliff, either.
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i think one hangup that will start on tuesday is the president will say, look, i was reelected to raise those tax rates on the rich, and you know what those republicans are saying in the house, ali? well, you know what, we were electing not to raise those tax rates. you can get agreement on entitlement reform, raising revenues and do some common sense things to get control over the next ten years. we're not that far apart. >> yeah, and i can also grow some hair and look like brad pitt. let me bring mohammad in. in a letter to the president this week, you called congress dysfunctional and you wrote to the president, you can mobilize the nation to put proper and timely pressure on congress to cooperate. how? >> by being very open about outlook and the dangers for employment, for living standards, for income and equality if we don't deal with our underlying problems. and secondly, by going forward.
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the fiscal cliff is a perfect example. like you say, ali, this was a problem of our own making, and if we're not careful, this will throw us into a recession. that's the last thing we need. the president can take a leadership role. i think, like steven, they will find compromise. i'm not sure they should exclude the top income. i think everybody should contribute to the solution. they will find a mini bargain and then we'll have to pivot to some really bigger issues that are key to this economy growing over time and getting physical sustainability over time. >> david n the simplest terms, the fiscal cliff means $7 trillion, the combination of things expiring, taxes going up, spending cuts over the course of a decade. i want to be serious about this without being fear mongering about it, but it is serious. that might sound like a dream situation to a deficit hawk like you. why don't you like the idea of going over the fiscal cliff? >> we must not go over the
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fiscal cliff because it would cause us to go back into recession, undercut confidence in government and potentially undercut the ability to get a grand bargain. we need to make a down payment. we need to extend tax provisions and spending reductions to set up a grand bargain in 2013, and the president needs to show extraordinary leadership and go directly to the people with the facts, the truth and the tough choices. he should call congress back and say, no deal, no break. you don't get any days off other than weekends until we have a deal on the fiscal cliff, and we ought to do the same thing in 2014 for a fiscal grand bargain. >> christine, that means we don't get days off, either, while they're doing it, but it might be worth it. this is something david has been pushing for a long time in terms of government spending. he says if we do go over that fiscal cliff, it does look like greece. you have an economy that plungz, a gdp that plunges and you don't have a way to dig out of that.
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>> if you do go over the fiscal cliff, which i don't think anybody around this table thinks it will happen. but if you do go over the fiscal cliff, you will suffer the consequences. the world will suffer the consequences, there's no doubt. what worries me is a mini bargain that fudges the cliff for the moment, to mix the metaphors, because there is nothing to fundamental start to address the bigger problem. >> why would you worry about that? it's not like we ever do that. >> that's the problem, because we are crunching numbers. i don't think getting back from the fiscal cliff will be that difficult. the moment reality hits everybody concerned, common sense will prevail. but what happens after that? >> washington showed such terrible leadership in this, it's really horrific. we were just in washington for the election, and when you talk to people in congress and the people around them, ali, they say it's not going to happen but they don't know how we're going to get there, and they also don't seem to get that even a few days off the fiscal cliff is
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something to really hurt stock market, really hurt businesses. there are people on the left, we're talking about people on the right talking about not giving up their taxes. they're saying, let's go over it, it's really going to hurt. the president caved twice. he cannot cave again. even a few days off the fiscal cliff could spark a financial crisis. you just don't play with that fire. >> remember the day in 2008 when t.a.r.p. failed in the house and the dow plunged 770 points? >> they didn't get it then, and suddenly when the market was telling them the world is looking at you, america, saying, wow, you're a bunch of fools. then they spent several years denying they ever bailed out the banks. the point is they don't get that it's not really up to them. it's up to them to make sure the rest of the world doesn't completely lose confidence in them. >> what this comes down to, we all think it's not going to happen, we hope it does happen, but it comes down to the
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decision of who pays more tax, who pays less tax and what benefits stay or goes away. john boehner, the speaker of the house, says republicans will accept higher tax revenues but not higher taxes. huh? more when we come back.
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the stakes couldn't be higher.
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if the united states goes over the fiscal cliff, taxes will rise for nearly 88% of americans next year. we're talking about an average increase of $3500 per household. at the same time, $100 billion in automatic across the board spending cuts will take effect, half in defense, half in non-defense, and a million jobs could be lost. unemployment will jump back to 9% next year and the u.s. economy could be plunged back into recession. avoiding the fiscal cliff will require compromise, something that's been in short supply in washington over the last few years. stephen moore joins me again. john boehner, stephen, says they will accept higher tax revenues, but not higher taxes. explain that. >> it's not that complicated. we all agree the best way to bring this up is to bring the growth rate up from the 1% we've had in the last year or so.
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number two, when i talk to republicans, he said, look, we're willing to put these higher revenues on the table. we're willing to close the loopholes in the tax system, get rid of a lot of the car vouts that people benefit from those are rich people. i think republicans are willing to compromise on this. i have to say this. i'm frustrated wall of you on this, because yes, we have a fiscal cliff that's going to hit in january. but let's not forget the whole context of this. we are running $1.2 trillion deficits and we can't keep doing that year after year after year. we have to come up with solutions. >> david walker has been banging on this drum as well. >> the key is we have to avoid the fiscal cliff, but we have to address the much bigger fiscal abyss. those are the large and structural deficits due to growing trends, an outdated tax system. here's the good news.
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people are a way ahead of the politicians. we had a minimum of 77% support on social security and taxes. 85% believe it's going to take spending reductions and additional taxes heavily weighted towards the spending reductio reductions. we just need leadership. >> right, it needs to be done in a responsible way. let's bring in mohammad. tell me how you see this. we've heard from john boehner, we've heard from the president. we are lacking details, but it seems to me we're ahead in this conversation than we have been in the last six months. where do you see this going as the guy who looks into the credit risk of everybody in the world? >> i want to extrapolate, ali, from every experience in california. we voted for higher taxes in order to fund better education. and i think people are recognizing that fiscal sustainability has a newman rart and a deno, ma'minator.
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the numerator is about sustaining growth and paying debts. i think it's known that we need to establish both. it's not going to be a big jump, and i think richard is correct in reminding us this is a long haul, and let's focus on both the numerator and the denominator. >> the point steven has just made, and i will point out as well, you cannot have it both ways. you cannot remind us on the one hand that there is a $1.6 trillion deficit and on the other hand say we won't have tax raised. >> this is america. we've been doing that for 25 years. >> that's exactly the problem. you're going into the negotiations saying, ah, we've got to do something about it, but we won't raise tax rates.
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you can't do it. >> can i make a big point here, think about the cuts in tax and increases which did make t right? you look at the fiscal cliff. that's 7 trillion in ten years with no thought, no nuance, no kind of strategy about what's the best for america -- >> it's a sledgehammer. >> instead of a big dull hatchet, we need a scalpel with a bunch of surgeons. and congress is sitting there with saying they're going to get there. and that's bad. >> your solution is a lot more surgical. as david said, he went around the country and talked to people, and i found the same thing when i was on the cnn express on that bus trip, people understand what this means. they understand that we have to
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cut back on our spending but they are concerned about the lack of sophistication with which washington is handling this. >> yeah, but when? i get so sick of this. everybody says we have to cut spending. even my good friend david walker who i have so much respect for. david, when are we going to cut the spending? the answer always seems to be we'll do it next year or the year after that. it's not such a bad thing if we start now. i'm not so opposed to 10% spending cut across the board. you say the spending cuts won't hurt the economy. my goodness, look at your state of california. the dingbats in california just raised the highest income tax to 13%. every businessperson is going to move to texas, which by wait is the fastest growing state in the country, which has no income tax. i do think the evidence is strong in this, and i don't want to see the united states go down the route of california because california is the state looking
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bad right now. >> we want to be fiscally responsible and pay the bills. we're going to come back and hear from mohammad about that and david walker. stay with us. you're watching a very animated version of "your money."
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okay, i got the panel back. i want to get right into it. steven moore points out that california is a bad example because state tax rates are so high in order to pay for some of the investments they've made. your response? >> so i would say, just do the math. do the math. everybody agrees that in order for us to improve our prospects, we need the following. we need tax reform, renewe need entitlement reform. in order to close the gap, we also need certain tax rates to go up and we need certain spending to be cut. and finally, in order for this to be sustainable, we need to wrap it up with other issues that address ability to grow. the labor market, credit, infrastructure. so i will tell you it's not
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about a partial solution, it's about a holistic solution that's going to involve a lot of steps, including higher tax rate, because that's what the math tells you. >> so david, stephen moore says when are we going to deal with it. the end of the fiscal cliff is less when but more how? >> right. on the fiscal cliff, you cannot extend the payroll tax cut. that's over $100 billion. you can recognize that it's less employment benefits. and then what you can do is you can set up a bridge to a grand bargain to where we're focusing on getting debt to gdp, public debt, down to 16% in 10 to 12 years which will require everything we're talking about. budgets controls, social reform, additional reforms but in an intelligent way. you can do that. it's possible with leadership. >> but david, you've been talking about this for so long when we weren't in a crisis and
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nobody listened then. not nobody listened, people listened, but the decision makers in washington didn't listen. will they listen this time? >> i think they will listen this time because the number one issue for americans was the economy, jobs and fiscal responsibility. what we need to do, as i said, is that president obama needs to take a page out of president clinton's book. he needs to use the bully pulpit. we need a meaningful citizen education engagement campaign. we need to demonstrate to the far right -- >> do you think that's part of the issue, though? >> i think he wants a deal. i think he needs a deal. >> do you think president obama would have a deal you would be satisfied with, stephen? >> i think if president barack obama moved a little to the right because he governor earns from the left -- americans are first and foremost. we want to get this problem solved. >> let's say barack obama moves to the so-called middle, wherever that is, but still says the top 2% has higher income
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taxes. >> the republicans will not go along with higher tax rates. he can say we'll close the loopholes, we can do everything, but i think the republicans honestly believe, and i agree with them on this, that raising those tax rates will hurt the economy more than it will bring down the deficit. you're the one who has always said jobs are number one. you're not going to raise money by getting rid of those jobs. >> no, no, no, no, no. >> look, you have an advantage here in that you're trying to put -- you're trying to put humpty dumpty together before he's fallen off the wall. what we've learned from europe is is you don't want to wait for him to fall off the wall. the markets will do your job for you. austerity -- i would never have done austerity in europe, and we're paying the price for it in
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greece, and spain is about to get hit. and italy is about to get hit. but you have the chance to do it with the warning beacon flattering. if you do not do it, if you do not deal with this deficit, and in the long term, i agree with you, you do need to deal way trillion-dollar deficit sooner rather than later. then someone in the market or investors, because that's the big difference, ladies and gentlemen. china is now a bigger player in the global economy than it was before. you're in new territory. go on. >> hear, hear! >> the rules of this game have changed. >> david, we have to keep in mind if you use honest and comparable accounting, the total government debt as percentage of the economy today in the united states is worse than of country in europe but one, and it's called greece. and we don't want to follow their example. we've got to deal with these structural deficits, but we're not going to deal with them in a lame duck session.
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let's do a down payment, let's do a bridge to a grand bargain. we need to focus on debt to gdp. that's what matters, and after world war ii, we went from over 100% debt gdp to over the 30% range, and we didn't pay off a dollar of debt because we constrained deficits and had fiscal responsibility and we grew the economy. that's what we need to do. >> we continue to speculate here at cnn that somebody might ask you to be the secretary/treasurer of the united states. you continue to say that's not true. but we would like to hear your closing words on this, because you are the guy who is going -- you are going to lead the charge on deciding whether or not investing in the united states is a good bet or bad bet. you're still on the good bet side. >> yeah, i am, because we expect the following to happen. we talked a lot about what should happen during this program. let's speak to what's likely to happen, and what's likely to happen is our politicians will come together.
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they will meet in the middle on some issues resulting not in a 4 to 5% physical retraction that would send us into a recession, but in a 1.5% fiscal retraction, what david calls the down payment. the next step is a more difficult one and it's what richard has spoken torqu, which to pivot for sustainability and growth. that's going to require a lot of hard work, but we think it's feasible over time. in the meantime, let's remember that europe is getting worse, not better. let's remember that china is slowing. let's remember that the middle east is becoming less stable, and therefore, we have no time to wait. we have to move forward. >> excellent. thank you so much for joining us. david walker is the founder and ceo of the comeback america initiative, christine is the host of "your bottom line." richard stay where you are. things are about to get much more interesting in washington. richard quest and i will get
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time now for some q and a. same congress, same president, but more importantly, the next two and a half months will be very different. the election was a turning point and now things get interesting. joining me now in studio to debate this is richard quest, the host of "quest means business" on cnn international. he's the tall guy with the big ears. richard, good to see you in person. you're taller and you have bigger here's in real life. richard and i are old friends. this time it is more of a fill in the blank. so the election is over, now it gets interesting because of what? richard, you have traveled all this way to join me in new york, so you go first. 60 seconds as you start it on the bell. >> 60 seconds on now it gets interesting because. now, ali, it gets interesting
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because nothing has changed. just think about it for one moment. the fiscal cliff remains, and the united states is getting ever closer to going over the edge. but worse than that, the european sovereign debt crisis continues. greece still hasn't had its latest trench of money, the situation in spain is deteriorating, china is slowing down. and as carl younger said in europe, everybody knows what needs to be done, whether it's in europe or the united states. everybody knows what needs to be done, they just can't get reelected if they do it. worse than that, if they actually do it, they could find themselves to be in deep political trouble with their own party. so now it gets interesting because. it gets interesting because the stakes are so high. whether it's in europe or the united states, either side could
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have an accident which would ultimately pull them over the edge. now it gets interesting, ali, why? >> richard, now it gets interesting -- start right now. now it gets interesting because everybody has got to grow up. president obama, the second term. it's about legacy. nothing reunions a legacy like presiding over an economy that plunges into recession. but president obama doesn't have to run for office again. the 435 members of the house of representatives do, along with about 33 senators in two years. so it's time now for the children to leave the room, and i say that at risk of insulting real children who tend to be behave more responsibly than some of your elected officials have. will republicans, backed up by a ridiculous pledge to not raise taxes by a weakened tea party and licking their wounds after a general repudiation of fiscal conservative policies depart from that principle long enough
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to achieve that so-called grand bargain. well, richard, that's anybody's guest, because if they do, things will get really interesting, because despite what you say about things being the same, same congress, same president, i think they're very different. >> now it gets interesting. >> it absolutely does. that's our wish list, but of course if you and i had any real influence, we wouldn't actually be here. i will introduce you to one of the most influential and, i think, dangerous men in washington. he could ultimately be responsible for taking the u.s. over the fiscal cliff and he's not even elected. ♪ we're lucky, it's not every day you find a companion as loyal as a subaru. love. it's what makes a subaru, a subaru.
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if the u.s. falls over the fiscal cliff, 80% of house holds will see their taxes go up. so you would think republicans in congress who signed this pledge not to raise taxes would be tripping over themselves to solve the problem. but they can't. i'll go one on one with the biggest impediment to overcome in washington. back in 90 seconds.
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the most immediate threat facing the united states is the fiscal cliff and the election results did nothing to change the balance of power that we have seen in washington in the last two years. a democratic president now reelected calling for taxes on the richest americans to rise. a republican-controlled house of representatives that opposes any increase in tax rates and a democratic senate caught in the middle. now, avoiding the fiscal cliff will require compromise, but there is no compromise possible when one side says they can't lose. everything has to be on the tab table. to succeed, all parties need to give something up for the greater good, but there's a problem. it's a big problem. almost all the republicans in congress have signed a pledge, a pledge not to vote for any net
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tax increases under any circumstances. it is a pledge offered by grover n norquist, the founder and president for tax reform. let me read the pledge to you. it reads as follows, i, blank, pledge to the taxpayers of the blank district in the state of blank and to the american people that i will, one, oppose any and all efforts to increase the margeal income tax rate for individuals and businesses, and two, oppose any net elimination of reduction or elimination of reductions and credits unless matched dollar for dollar by further reducing tax rates. in the current congress, the one in place until january, 238 representatives and 41 senators have signed. by the way, one senate democrat, ben nelson of nebraska, and two house democrats, robert andrews of new jersey and ben chandler of kentucky, have also signed it. neither nelson or chandler will be in the new congress, but the people who won their seats have also signed the pledge.
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interestingly, six house republicans did not sign the pledge. all but one will be in the next congress. pennsylvania congressman todd plats retired. he will be replaced by republican scott perry who also didn't sign the pledge. 27 current representatives in the congress didn't sign the pledge, either. richard lewis lost his battle to a tea party candidate and olympia snow remains in the senate. but the people who won their seats also did not sign the pledge. the author of the pledge is one of the most powerful fiscal conservatives in the country. grover norquist, thank you for being here. where does your group get its money? who is behind the effort for this pledge? >> well, the pledge doesn't cost any money, but we have donors, if that answers your question. they make that commitment to the american people. as you pointed out, we have a
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majority in the house that's committed to not raising taxes. the leadership of the house and the senate republicans have made this commitment to the american people. >> if the pledge doesn't cost any money, then why did american crossroads gps give you half a million dollars? >> they were supportive of our efforts in campaigns and so on, sure. the pledge itself doesn't cost any money. >> i understand that. only photocopying costs, i guess. >> people use e-mail. >> what happens to the people who break the pledge, those 238 people in congress, what happens if they break the pledge? do you pile it on and try to get it defeated in the next election? >> the best example of that is herbert bush who ran for election in 1988. signed the pledge, said read my lips and signed the pledge and won the general election. two weeks later he walked in with democrats who promised to cut spending if he would raise
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taxes. taxes were raised. spending was not cut, spending was increased, and he lost the next election. we didn't runny ads against bush. the whole country knew he had been taken to the cleaners, that he promised not to raise taxes and he didn't keep his commitment. so these are self-enforcing. why? because the american people elect people who they want to reform government rather than raise taxes. >> i'd like to think it's that pure, but the fact is, you have a lot of money. so the money has to be used for something, right? you can't be getting 4.5 million from these guys, 200,000 here and there for something. clearly that money goes to something. how does the money get spent to defeat people who break the pledge? >> we've run ads to let people know who has taken the pledge and who doesn't, we run phones to let people know who takes it and who doesn't. if being open to taxes is a popular thing, then they should consider our advertising to let
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them know we're open to tax increases and could be a tax contribution to them. >> our gdp growth rate is 2% and yet we ever the lowest tax rates in the united states that we've had for 30 years. how do you connect the tissue on this? we've got the lowest tax rates again in 30 years in america, and yet we've only got a 2% growth rate. so how does that argue that yet lower tax rates will create more growth? >> first of all, we had a 28% top marginal tax rate in 1986 up until 1990, so we actually have a top rate of 35%. we have a significantly higher tax rate than we had during the reagan years. >> but the tax burden is lower. >> of course, it is, because the total tax burden is lower because if we had a growth rate like reagan's, a recovery, a stronger -- >> greater than 4%. >> there would be 10 million americans at work if we had
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reagan's level of recovery who aren't at work now. >> if i had a full head of hair i could look like brad pitt. we don't. we have a 2% growth rate not projected to do better than 3%. >> with a top tax rate that obama wants to take to 34%, with tsunami regulations and an attack on energy, they now announced they want an energy tax, something they didn't announce during the campaign. so there's a whole series of damaging things. the market sees this is not exactly a healthy plan for the economy. of course you have a lousy growth rate as long as you have democrats threatening to throw out tax increases on the economy in addition to the regulatory burden, you've got french rates of economic growth. >> let's say we let the bush tax cuts expire at the end of the year, and then congress moved to increase tax rates. would that count? would that violate your pledge? >> that would clearly be -- look, you can't go to the american people and say, we raised taxes 500 billion and
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then we cut it 400 billion, please only look at the cut, not the overall rate. if you raise taxes $100 billion on the american people, they're going to notice it. it doesn't pass the laugh test. >> grover, thanks for being with us again. >> you got it. >> despite the grover norquist pledge, the talks in congress does sound vaguely promising. >> let's rise above the dysfunction and do the right thing together for our country. >> compromise is not a dirty word. >> so will our leaders rise to the occasion and drag us over the fiscal cliff with them, or will they compromise? we'll gain the odds of compromise next on "your money." what's in your ear? oooo! a quarter!
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crestor got more high-risk patients' bad cholesterol to a goal of under 100. [ female announcer ] crestor is not right for everyone. like people with liver disease or women who are nursing, pregnant or may become pregnant. tell your doctor about other medicines you're taking. call your doctor right away if you have muscle pain or weakness, feel unusually tired, have loss of appetite, upper belly pain, dark urine or yellowing of skin or eyes. these could be signs of rare but serious side effects. ♪ is your cholesterol at goal? talk to your doctor about crestor. [ female announcer ] if you can't afford your medication, astrazeneca may be able to help. last year's debt ceiling debacle and this year's fiscal cliff have one thing in common. a failure to reach compromise in washington is a threat to the brink of a recession again. there is a solution, though. it's one that university of
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pennsylvania president amy gutman writes about in her book "the spirit of compromise. why governing demands it and campaigning undermines it." i'll talk to her in a minute. in the obook, gutman writes abot the bipartisan tax compromise in 1986 in which she writes president ronald reagan and the speaker of the house on the right there, tip o'neill, were able to put their minds on governing rather than campaigning. it wasn't easy to do it, but they did it. they got together and passed significant tax cuts that really benefited many americans. jump ahead to 2010 to the debate over obamacare where the compromise in passing the affordable care act occurred only between democrats. not a single republican joined them in the vote. amy gutman joins me now. thank you for being with me again. good to see you. in the book you fault elected officials for spending most of the time campaigning rather than
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governing like they did 30 years ago. what's changed? why is governing different than 30 years ago? >> as the book foreshadows, and i wrote the book with my harvard colleague, dennis thompson, we have been overshadowed where every day is election day. it's been truly overwhelming, and the good news, i think, is the american people have been underwhelmed by that, so i think it's a time for change. but what's changed is the 24/7 media, the influx of unlimited money into politics, the fact that it is easy to stand on principle and demonize your opponents and it makes good copy, all of that has made the campaigning overwhelm the governing in our democracy. >> paul krugman wrote in the
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"new york times" this week and he said the president shouldn't do anything about the fiscal cliff at the moment. he had, stand your ground, mr. president. don't give in to threats. no deal is better than a is bet deal. that would put extreme pressure on republicans to make a deal as the economy tags. we talked about the extreme party but what about pressure from liberals on the president to resist compromise? >> so i said it before the election and we say it in our book, you can blame one party more than the other but, in the end, both parties are going to have to compromise and the victorious party is going to have to make the extreme ends of its party somewhat unhappy in order to make the party, the party of the common good and also to basically rule in a way
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that helps the vast majority of the american people who are not on the extreme. i read paul krugman's kcolumn ad it's fine to hold as much ground as possible but it is misleading to the american people to think that staring the fiscal cliff in the face and saying, let's go over it because we're not willing to compromise is a winning proposition. the president is running no longer for re-election. he's running for history. >> right. >> and he can be historic president if he makes a really good compromise and gets us over this fiscal cliff. >> compromise, as you've written in your book, does mean all sides giving something up. we'll watch this carefully. amy gutmann, thank you for being with us. are you ready for the next big shock to the financial
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system? my next guest saw the t.a.r.p., the 2008 bang bailout. he says, no, we're actually worse than the financial crisis. n for your legal matters. maybe you want to incorporate a business you'd like to start. or protect your family with a will or living trust. legalzoom makes it easy with step-by-step help when completing your personalized document -- or you can even access an attorney to guide you along. with an "a" rating from the better business bureau legalzoom helps you get personalized and affordable legal protection. in most states, a legal plan attorney is available with every personalized document to answer any questions. get started at today. and now you're protected.
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americans have lost faith in their banks. confidence is at an all-time low. only 21% say that they are feeling good about us bank this year. look at the trend going all the way back to 1980, from the mortgage meltdown and subsequent bailout, scandals have battered our financial institutions. billions upon billions were lost from the london whal e-trader. hsbc was convicted of money laundering practices and nearly every bank is under suspicion
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after barclays was outed for the libor rate that affects everything from your home bank to the credit cards. dodd/frank is the reform of president obama's first term. it aims to put an end at too big to fail bailouts. some dodd/frank regulatory rules have yet to be written but president obama vows not to go back on its efforts. >> after all we've been through, i don't believe that rolling back regulations on wall street will help the small business woman expand or the laid off construction worker keep his home. >> critics say dodd-frank didn't go far enough and may have made big banks more dangerous. one of those critics is neil barofsky, assigned to monitor t.a.r.p., the $700 billion bailout. he's since written "bailout," an inside account of how washington
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abandoned mainstreet while defending wall street. look back at the polls in 2008 from finance, real estate, and insurance industries. in 2008 he can got more than mccain did. in 2012, that collapsed for president obama. he's not getting support from wall street on regulating anymore. >> no. one is they looked at what romney was offering which is a complete teardown of dodd/frank. the other thing that i think is very important to those numbers is the tax policy and the fact that barack obama said that he was going to increase taxes on the wealthy which happen to be the big financial donors where rahm was talking about lowering those taxes. >> >> this is a good point. when people say why does corporate america seem upset that barack obama won, it could be investors who are upset, that
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it's going to cost them money. >> rich guys want to keep their money. >> this may not be a sign of what it's going to do. let's talk about financial regulation. americans still want to be safe from their financial institutions and they don't fully feel that way. in fact, they don't even partially feel safe. what's their sense? are we able to withstand another financial crisis? we're going to come close. we're going to come close again with the debt limit again. are we safe? >> we still have banks that are now bigger than they were before the financial crisis. they still don't have adequate capital. that is, their own money to shield them from significant losses. and we have government policy which is not doing the required things to make them safer, smaller. so that if we go off the fiscal cliff or fall off the european cliff, there's a danger that it could put us back into an aspiri aspiring financial crisis. >> dodd/frank and barack obama is not sure.
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he likes it. what makes it safer and what needs to be fixed? >> one thing that is good, the consumer protection bureau. elizabeth warren -- >> if the senate democrats -- the senate republicans had let her be nominated as the head of the consumer financial protection bureau. now they have her in the senate. don't know which one is worse for them. >> you might have been right the first time. chris dodd is the one who said that she was unconfirmable and did more damage than the republicans did. that bureau has done really good work, is protecting consumers. and having elizabeth warren in the senate now to defend that institution from attacks from congressional independents on it is funding is going to be a very important thing to watch and that's one of the really good things of dodd/frank that came out, we have an agency solely dedicated to the protection. >> thanks for being here. >> thanks for having me. we are here every saturday at 1:00 p.m. eastern and every sunday at 3:00 p.m.
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